Most Promising Retail Markets In Africa: Countries People Rarely Talk About

Via Quartz, a look at the most promising retail markets in Africa:

It is rarely mentioned countries, like Gabon, Botswana and Angola, that are increasingly becoming attractive for multinational retailers looking to launch and expand on the African continent, according to a new report. These countries are small and dynamic, their income levels are growing and their retail markets are unsaturated—offering ample opportunity for the enterprising retailer. 

AT Kearney’s 2015 Africa Retail Development Index (ARDI) ranks the top 15 retail markets on the continent based on how they fare on four indicators: market attractiveness, market saturation, risk levels and the time pressure to launch or expand operations.

“The challenge in Africa’s retail sector is not looking at one opportunity, but a set of unique differences that give rise to distinct opportunities,” says Jaco Prinsloo, Principal at AT Kearney’s Johannesburg office and co-author of the index.
This is why a small country like Gabon—with a population of 1.7 million people and one of the highest income per capita levels in sub-Saharan Africa—at $21,600 according to AT Kearney—tops the index. There’s little competition in its retail sector, compared to South Africa, a country with a highly saturated retail market.
Country Retail market stage of development
1. Gabon Developing
2. Botswana Mature
3. Angola Basic
4. Nigeria Developing
5. Tanzania Basic
6. South Africa Mature
7. Rwanda Basic
8. Namibia Mature
9. Ghana Developing
10. Senegal Basic
11. Gambia Basic
12. Zambia Basic
13. Cote d’Ivoire Basic
14. Ethiopia Basic
15. Mozambique Developing

While Gabon may top the index, the consulting firm argues its small size might be a downside: its retail market may not be ideal for a big retailer who is interested in big volumes and scaling their operations for example, but it may be ideal for a specialty retail chain in fashion.

Marieke Witjies, a consultant with AT Kearney and co-author of the index said that despite African markets broad challenges, retailers who are in it for the long-haul and those that take considered risks could reap the benefits. 

“To stay ahead of the curve in Africa’s, retailers need to ask themselves this question: Do I want to be a first-mover, or will I follow once the infrastructure is set up?,” says Witjies. 

Africa’s largest retailer, Shoprite, now with 189 stores across 15 African countries, is a good example of this. After struggling to find real estate for its expansion plans in a number of African countries, the retailer decided to form its own real-estate arm. In Nigeria, the retail giant hasset aside $125 million to build 10 malls that will have anchor Shoprite stores, as well as provide retail space for other retailers.

This entry was posted on Thursday, September 10th, 2015 at 5:29 am and is filed under Uncategorized.  You can follow any responses to this entry through the RSS 2.0 feed.  Both comments and pings are currently closed. 

Comments are closed.

Wildcats & Black Sheep is a personal interest blog dedicated to the identification and evaluation of maverick investment opportunities arising in frontier - and, what some may consider to be, “rogue” or “black sheep” - markets around the world.

Focusing primarily on The New Seven Sisters - the largely state owned petroleum companies from the emerging world that have become key players in the oil & gas industry as identified by Carola Hoyos, Chief Energy Correspondent for The Financial Times - but spanning other nascent opportunities around the globe that may hold potential in the years ahead, Wildcats & Black Sheep is a place for the adventurous to contemplate & evaluate the emerging markets of tomorrow.